Less than 1% of Kenyan bank accounts held more than 500,000 Kenyan shillings last year.
This indicates a lack of savings culture and increasing income inequality in the country. According to Central Bank of Kenya (CBK) data, approximately 800,000 high-value depositors, representing just 0.74 per cent of account holders, controlled 85 per cent of the nation’s Sh5.83 trillion in total deposits. This disparity provides insight into Kenya’s widening income inequality, where wealth remains concentrated among a small portion of the population. Despite maintaining an average annual economic growth rate of 5.0 per cent over the past decade, Kenya’s prosperity has not been evenly distributed. While the country boasts one of Africa’s fastest-growing populations of wealthy individuals, the economic benefits have been slow to reach the broader population.
According to CBK data, the number of high-value accounts saw a significant increase of 33 per cent from 600,000 in December 2022. In response to concerns about banking stability, the Kenya Deposit Insurance Corporation (KDIC) increased its compensation ceiling for depositors in failed banks from Sh100,000 to Sh500,000 in July 2020. As of December 2023, while banks held Sh5.8 trillion in customer deposits, only Sh857.8 billion (14.7 per cent) was fully insured by the fund in case of bank failure. The concentration of high-value accounts is split between wealthy individuals and institutional deposits from public and private sector enterprises.
This economic disparity has been partially attributed to the previously centralized government system that governed resource distribution since Independence. The introduction of devolved governance in 2013 brought hopes of addressing these economic imbalances, though analysts emphasize the continued need for private investment incentives across counties to promote wealth distribution. Notably, JPMorgan Chase, America’s largest bank, has decided against offering asset and wealth management services in its upcoming Nairobi office. Analysts suggest this decision reflects Kenya’s relatively small population of multi-millionaires compared to Nigeria and South Africa, particularly given JPMorgan’s vast asset base of over $4.2 trillion, which dwarfs Kenya’s GDP by nearly 43 times.
The total deposits in accounts exceeding Sh500,000 have grown to Sh4.98 trillion from Sh4.02 trillion in the previous year. This increase suggests that wealthy individuals and corporations preferred saving over investment in Kenya’s subdued economy, attracted by double-digit deposit rates—a first in over a decade. Major banks dominate the high-value account segment, with KCB, Equity, and NCBA Group holding more than two-thirds of accounts with deposits exceeding Sh500,000. NCBA Bank Kenya leads with 416,481 such accounts, followed by Equity Bank with 124,098 accounts, and KCB Bank with 113,368 accounts. In contrast, smaller institutions like UBA Kenya Bank Limited, Development Bank of Kenya, and Middle East Bank maintained significantly fewer high-value accounts.
The banking sector’s stability concerns peaked in 2015 when the CBK assumed control of three mid-sized lenders—Chase Bank, Imperial Bank, and Dubai Bank—following their financial difficulties. This triggered a “flight to quality” as depositors moved their funds to larger, more stable institutions. The recent increase in deposit insurance coverage to Sh500,000 represents the first adjustment in over 30 years, though at 14.7 per cent coverage of total deposits, it remains below the International Association of Deposit Insurance’s recommended 20 per cent benchmark.
